The fresh wave of anti-Chinese supplier sentiment being seen in markets such as Australia and the USA spread to Deutsche Telekom’s (DT) heartland in Germany. In doing so, the Group’s close relationship with Huawei Technologies looked set to be put under closer scrutiny.

According to a report by Reuters, some “senior Germany officials” – unnamed, but apparently from the country’s interior and foreign ministries – are lobbying the government to prevent Chinese suppliers from building 5G infrastructure. An auction of 5G-friendly frequencies is slated for early-2019. Reuters said German officials have exchanged their security qualms with counterparts in Australia and the USA.

“There is serious concern”, claimed one anonymous Reuters source, adding that, “if it were up to me, we would do what the Australians are doing”. In August 2018, on the grounds of national security, the Australian government effectively barred Huawei and ZTE from supplying 5G kit to local operators, ahead of the country’s own ‘5G’ auction (Vodafonewatch, #168).

One issue ruffling feathers is China’s National Intelligence Law. Approved in 2017, the law states that Chinese organisations and citizens shall “support, cooperate with, and collaborate in national intelligence work”. The fear is that Huawei and ZTE could be asked to embed ‘back doors’ into equipment, so allowing Beijing access for the purposes of spying or sabotage.

A recent report in The Australian claimed that secret intelligence reports had outlined a case in which Chinese espionage services leaned on Huawei’s staff to get access codes to “infiltrate a foreign network”. The Australian government has repeatedly implied that Huawei and ZTE are not trustworthy custodians of 5G architecture, and that they pose cyber security risks because of the undue influence the Chinese government has over them.

For its part, Huawei issued a fresh round of statements denying all allegations of wrongdoing.

“Huawei’s products and solutions are sold in 170 countries worldwide serving 46 of the top 50 global operators, and meet the highest standards of security, privacy, and engineering in every country we operate globally, including the US. We remain committed to openness and transparency in everything we do, and want to reiterate that no government has ever asked us [to] compromise the security or integrity of any of our networks or devices. Huawei is an employee-owned company and will continue to develop its global business through a significant commitment to innovation and R&D, as well as to delivering technology that helps our customers succeed. ” – Huawei.

We’ve got it covered, says Höttges

Quizzed on a conference call about the expansive supplier role that Huawei plays for DT in Germany, which includes mobile kit, Open Telekom Cloud (public cloud infrastructure), and broadband access (Deutsche Telekomwatch, passim), Chief Executive Timotheus Höttges appeared to knock back any suggestion that there were immediate security or strategic concerns – either on its home turf or abroad.

He stressed that DT was “observing developments globally”, and that a dual-supplier strategy, along with business continuity plans, was in place in all markets. Despite Höttges’ outward calm, however, growing concern about undue foreign influences in the USA is giving handy ammunition to opponents of the proposed merger between T-Mobile US and Sprint (see separate report).

Security Innovation Lab opened up

Huawei opened a Security Innovation Lab on its existing site in Bonn (Deutsche Telekomwatch, #77). The Chinese supplier said the lab will “work closely” with German customers, partners, and research institutions, as well as government and supervisory authorities.

The opening ceremony was attended by Arne Schönbohm, President of the German Federal Office for Information Security (BSI), and Wolfgang Fuchs, City Director of Bonn. Within a collaborative environment, said Huawei, it intends to have “close and regular cooperation” with BSI, focused on new technologies (especially 5G, artificial intelligence, Internet of Things, and smart-cities), standardisation efforts, and the verification of product safety.